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CAPRA MEETING, February 10, 2012

ATTENDING: Paul Bingham, Stalin Mafla, Bill Godfrey, Kane Gillespie, Norm Goodman, Margaret Schedel, Shmuel Eivav, Michael Chiarello, Larry Wittie, Pam Wolfskill, Gene Katz

Mark Maciulaitis’s budget presentation
Mark provided a power point presentation on the current SUNY budget, an electronic copy of which was sent previously to all CAPRA members.

Key points

The SUNY2020 plan for Stony Brook (and Buffalo) was approved by Governor Cuomo, and will dramatically improve the University’s financial health. However, it will not compensate for the budgetary cuts of the previous four years.

Governor Cuomo’s Executive Budget didn’t contain any additional reductions to SUNY’s operating budget for 2012/13. There will be a $300 increase in undergraduate in-state tuition rates and an increase of 9-10% for out-of-state students. Also, a $75 yearly increase in fees was approved for Stony Brook and Buffalo (and, when their SUNY2020 proposal is approved, for Albany and Binghamton as well). Governor Cuomo’s budget and the appropriate legislation include a maintenance of effort” agreement , which will be of great benefit to SUNY.

Provost Dennis Assanis Project 50 forward – Operation Excellence Update: The Finance and Budget Initiatives.
Mark Maciulaitis provided a power point presentation, an electronic copy of which was sent previously to all CAPRA members. Subsequently, there was a discussion of this model with him and Provost Assanis.

Key points

The budgeting process has already begun to improve as the campus moves toward the RCM (Responsibility Center Management) model. This is an “all funds approach.” The Project 50 Forward Steering Committee approved RCM for SBU, and it must be used for all colleges and departments/programs. A small committee had previously visited the University of Michigan and met primarily with administrators there to discuss their experience in using the RCM model on their campus.

RCM model will be used to link the campus budget allocation process directly to the Campus Strategic Plan. The provost will allocate resources to the various schools and colleges based upon enrollments and activities, with the same criteria to be used by the academic deans to allocate resources to their departments/programs. This model provides an incentive to increase department/program enrollments. The members of CAPRA stressed the importance of ensuring that the deans monitor very carefully the way departments/programs are increasing their enrollments to be sure that it is not done at the expense of academic quality or students’ academic career interests.

In this model, direct revenue allocation is expected to create incentives for revenue growth. Revenues will go back to the areas that generate them minus a tax that will be used to meet a variety of campus needs. This tax could be as much as 24% in the beginning and would be used in part to cover the areas that are not able to generate (sufficient)revenue.

There will be a 3-year phase-in of this budgetary model. There be no change to the current budget model for the first year. By the 2nd year, the Campus Strategic Plan should have been completed and, consequently, will be used in conjunction with the RCM model for colleges and departments to develop budgetary “compacts” for implementation in the 3rd year.

In the discussion, it was pointed out that the RCM model was devised basically for industrial organizations in which it is assumed that competition among units would benefit the organization. But, there was general consensus that such a model seems less appropriate for a collegial organization such as a university. Also, Provost Assanis was asked what metrics would be used to provide the basis for budgetary allocations based on this model. He responded that the actual metrics had not yet been determined, but they would be geared toward program quality. It was generally agreed that any incentives built into this model should be used more to enhance program quality than to generate revenue.

The committee will devote its next meeting to consider the RCM model in light of today’s presentation and discussion and to prepare a report on it for submission to the Executive Committee of the University Senate.

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